Despite the market currently going through a difficult period, many experts believe that by the end of the year, after the rainy season, numerous real estate projects will be initiated, thus driving the steel prices to recover.

Over the past two months, steel prices have continuously declined. Currently, after 18 price reductions this year, steel prices have reached their lowest point in the past 3 years, maintaining around 14 million VND per ton. Although the market remains challenging, many experts anticipate that as we pass the rainy season and real estate projects begin implementation, steel prices will experience a recovery.

So, what are the reasons for this decline?

At steel dealerships, steel prices are currently selling at over 14,000 VND/kg (equivalent to 14 million VND per ton). Therefore, compared to April 2023, steel prices in the market have decreased by about 1.5 - 1.7 million VND per ton, depending on the brand.

According to the Vietnam Commodity Exchange (MXV), the third quarter of each year is typically the period of lowest consumption, due to the rainy season and the lunar month of July, which often sees very few civil construction projects starting. As a result, factories have continuously reduced prices to meet production and sales plans. Although steel production and business activities improved in July, the level of recovery is not yet strong enough.

The Vietnam Steel Association (VSA) also stated that the main reason for the continuous decline in steel prices is slow consumption. Currently, many civil projects have not started, and although there is progress in expressway projects, it is not strong enough to improve the steel market situation. They also believe that domestic steel prices must continue to decrease to compete with the cheap steel from China, as they keep reducing export steel prices.

Furthermore, the decline in inflation in various markets has reduced the demand for housing and infrastructure construction. However, more optimistic prospects arise as demand for construction is expected to increase significantly in the fourth quarter of 2023.

In conclusion, while the steel market has faced significant challenges and price declines, there is hope for a rebound in the near future, particularly as we move past the rainy season and see increased activity in real estate and construction projects. The timing and strength of this recovery will depend on various factors, including market conditions and demand in the coming months.